New York City lost an estimated $366 billion in wealth in a 12-month stretch that ended on June 12. It was the result of thousands of rich people abandoning the city at the onslaught of COVID-19. While people in all income brackets fled the Big Apple, 61% of them were at or above the $100,000 annual earning level, according to statistics provided by United Van Lines.
New York City is already starved for tax revenue as its expenditures have skyrocketed to deal with the consequences of COVID. Now the loss of high-end earners has reduced tax collection by 46%. Furthermore, that steep decline in tax collection followed an earlier drop of 32% in May and a 23% dip in April.
The state’s comptroller called the loss of tax revenue the most devastating since the Great Depression.
The question now is, will these departed rich ever come back? This remains a vast unknown. For one thing, just when the COVID-19 virus will be brought under complete or at least reasonable control remains unclear. There are high hopes that mass vaccinations that might be available as early as spring of 2021 will be a turning point. Even then, however, those who have left NYC may have little incentive to return after re-establishing themselves in suburbs or other cities.
New York Governor Andrew Cuomo said his office is strategizing ways to entice the rich to come back. He admits that is going to be a “heavy lift.” He added that those who have left may get used to the idea that they are no longer paying the New York City surcharge.
Some of New York’s former wealthiest who have fled have already expressed their opinions. Hedge fund manager and multimillionaire James Altucher recently penned an editorial that declared “NYC Dead Forever.” He moved his family to Miami.
There is a different point of view, however, and it comes from the millions of middle class and economically lower class people who can’t afford to pack up and leave for greener pastures. They say “goodbye and good riddance” to the wealthy elite. Writing in The Guardian, Arwa Mahdawi said the rich will eventually come back to New York City after they “wait for everyone else to rebuild it.”